Imagine the excitement of gambling but without the stress of losing hard-earned money. That’s what sweepstakes casinos bring to the table. Users get to dive into the games, soak up the excitement, and even chat with other players who are just as hooked on the fun.

A sweepstakes casino is an online gaming site where luck chooses winners. Users can jump into the action for free and still have a chance at winning cool prizes. Unlike lotteries, these sites let you jump into the action, win real prices, and play within the rules in many places — all without spending a dime.

Let’s explore sweepstakes casinos—what they are, how they work, why people love them, and how you can get started.

What Are Sweepstakes Casinos?

Sweepstakes casinos bring together classic casino games and exciting prize opportunities, letting players enjoy the fun for free while having a shot at winning cash or gift cards.

In a sweepstakes casino, players use tokens they can earn or buy to play for free—but these tokens can’t be cashed out directly.

To play games on sweepstakes casinos, players use virtual currencies. There are two types of virtual currencies: 

• Gold Coins (GC): Tokens used for gameplay only and have no monetary value. 
• Sweeps Coins (SC): Tokens earned through promotional purchases and giveaways can be redeemed for cash prizes or other rewards.

GC is mainly for entertainment, with no real-world rewards, while SC gives you a shot at sweepstakes or tournaments, where you might be able to redeem prizes.

Players receive GC coins while signing up, and they are free-to-play. Some sweepstakes may combine random selection with specific requirements, where entries must meet rules (valid submission, correct format), or confirm eligibility before prizes are awarded. You might wonder: how do sweepstakes make money? 

The key is on-site purchases. Sweepstakes casinos use SC as tokens, each equal to 1 USD. When a player buys 100 SC, they pay $100. Upon withdrawal, they receive the same amount in USD (1 SC = 1 USD).

To sum up, the Sweepstakes model doesn’t require wagering real money. That’s why this framework works in jurisdictions where real-money gambling might be restricted, including most U.S. states.

How Do Sweepstakes Work in Online Casinos?

Sweepstakes casinos aren’t like regular online casinos where you deposit money and place bets. Instead, they use a two-currency system, letting you play without putting real cash on the line.

Here’s how it works:

Free Registration

Players can join for free and score welcome bonuses in Gold Coins and Sweepstakes Coins. Take Stake.us, for example—a well-known sweepstakes casino in the U.S.—which hands out 550,000 Gold Coins and $55 worth of Sweeps Coins to new players. 

GCs are tickets that players can use to enter a game. If they run low, they can purchase more directly within the game.

Players can receive Sweeps Coins through in-game purchases, mail-in requests, or promotions.

Playing Games

Players use GC just for fun, while SC is for playing in promo mode. If they win, they can redeem these coins for real prizes, such as cash, gift cards, or other rewards.

Redeeming Winnings

Players need to collect enough SC and meet the playthrough requirements before they can cash out. Most of the time, they’ll need at least 50 or 100 SC to redeem for cash or prizes.

The biggest difference between sweepstakes casinos and regular ones is that you can play casino-style games without putting your own money on the line. They use virtual coins, so you can keep the fun going without spending a dime.

Benefits of Playing Sweepstakes Casinos

Sweepstakes are a unique type of online gambling that benefits both players and operators and distinguishes them from traditional gambling platforms. 

The key advantages include: 

No Real Money Required

We have said it many times and will repeat it: players don't need to wager real money to play a game. They can buy them in-game if they want more virtual coins for gaming, or don’t buy if they prefer to spend nothing playing online casinos. 

Opportunity to Win Real Prizes

Players can enhance their engagement by trying to win and redeem unique coins for valuable prizes, such as cash or gift cards. 

Social Interaction

A lot of sweepstakes casinos feel like social casinos, packed fun interactive features. Players can chat, climb leaderboards, and take part in community events, making the experience more engaging and giving them plenty of reasons to return.

Diverse Game Selection

The biggest difference between sweepstakes casinos and regular ones is that you don’t have to spend money to play. Other than that, they have the same games—slots, table games, and even live dealers.

Legal Accessibility In Most Jurisdictions 

Sweepstakes casinos are legal in places where regular gambling is restricted because players don’t need to spend real money. This makes them available in many regions, including the U.S., Australia, and Europe.

Inclusive Participation

The free-to-play model allows a broad audience to play sweepstakes casino games. Players mustn't pay to play or make a purchase, and they don't need any skills to compete in games, as winners are chosen randomly. 

What Types of Games Are Available in Sweepstakes Casinos?

Like regular online casinos, sweepstakes sites offer a wide range of games. Some even have over a thousand options, including slots, table games, live dealer games, and Slingo.

These games are often grouped into categories, such as popular, hot, new, and so on. 

Here’s an overview of the most popular game types on sweepstakes sites.

Slots

The biggest category often offers a thousand slots with many themes and game mechanics. This includes video slots, classics, progressive jackpots, and mega ways. 

Sweepstakes slots are developed by the biggest names in the industry, such as NetEnt and Pragmatic Play. These companies also create slot games for conventional online casinos.

Table Games

Sweepstakes poker, roulette, and blackjack are available on sweepstakes casino sites. However, their number and variety are less than those of slots.

Live Casino Games

Live games are even less common in sweepstakes casinos than in other categories. Undoubtedly, most sites don’t offer this at all. 

These games are versions of traditional tabletop games hosted by an actual human. Users can play live versions of roulette, blackjack, baccarat, and other table games. The only difference is that they use GC and SC to bet instead of real money.

Slingo

This is a combination of slots and bingo in one experience. The player’s goal is to match numbers on the reels to the numbers on a Slingo grid. 

How to Get Started with Sweepstakes Casinos

Sweepstakes casinos are an attractive opportunity for online gambling operators because this industry is beginning its growth. Here’s a step-by-step guide to how to get started with sweepstakes casinos. Let’s take a look at the U.S. as an example.

Step 1: Establish A Business Entity

Register your company with a physical office, ideally as a single-owner LLC, in New Mexico, Nevada, and Delaware for faster setup and investor-friendly laws.

Step 2: Have a Local U.S. Resident as a Shareholder

You must have a U.S. resident with at least 10% shares as a shareholder to pass banking requirements. 

Step 3: Open a bank account

To open a checking account, you need:

• U.S.-based director information
• Legal formation documents
• Physical office proof (utility bills, business signage, and the ability to receive mail)
• Initial bank deposit ($10,000 - $100,000 preferred)
• 2+ months of transaction history 

Major banks avoid sweepstakes casino operators using high-risk banks like Lexicon Bank and CB Canals. 

Step 4: Obtain a legal opinion for payment processing

Payment processors (e.g., Paysafe, North American Bank Cards) require a legal opinion from top-tier gaming law firms (cost: $20,000-$40,000).

Step 5: Meet regulatory compliance

To gain banking and payment approvals, you need:

• AML (Anti-Money Laundering) policies
• OFAC (Office of Foreign Assets Control) compliance
• Responsible gaming policies
• Data protection policies (Compliance setup cost: up to $6,000)

Step 6: Partner with high-risk payment processors

Choose high-risk PSPs (Paysafe, North American Bank Card) and submit:

• Legal opinion.
• Bank statements.
• AML & responsible gaming policies.
• Website with Terms of Service & Privacy Policy.

Initial accounts have a processing cap, which can be removed with a gaming processing history (Curacao, Anjouan). 

Step 7: Obtain a license

If needed, get a sweepstakes license or state registration, especially in California, Florida, and New York. Once that’s sorted, set up player verification, roll out your marketing plan, and start running your sweepstakes casino.

At MGL, we can significantly simplify the process for you. Just gather your personal documents—we’ll take care of the rest of the paperwork.

Are Sweepstakes Casinos Legal?

You probably know that traditional gambling means spending money to play games of chance, but many countries have placed restrictions on winning real money.

Sweepstake casinos get around gambling laws because they don’t meet all these elements. Players can enter the game for free; they don’t need to spend real money to redeem Sweeps Coins, and the primary currency is only for fun and has no real-world value. 

Meanwhile, regulators all over the world, including the USA ones, start banning sweepstakes casinos considering them as another form of gambling. 

For now, sweepstakes casinos are legal in several jurisdictions:

• United States (except Idaho, Washington, New York, Connecticut, Nevada, Michigan, Delaware, Maryland, West Virginia, and New Jersey)
• Canada (mostly allowed, but Ontario has stricter online gambling regulations)
• Australia (legal but regulated)
• New Zealand (legal if the sweepstakes casino operates from outside the country)
• United Kingdom (allowed, but Gambling Commission may regulate them if Sweeps Coin can be redeemed for cash).

The current regulatory landscape can change because some products seem over the line as quasi-casino offerings that closely resemble traditional gambling. This makes them questionable under current legal frameworks. 

But another question arises: how to run sweepstakes casinos outside the United States. Is it even possible?

U.S. citizens can run sweepstakes and other types of casinos online and fully legally. The only thing they need to do is get an offshore license in any jurisdiction, such as Nevis, Anjouan, Kahnawake, Tuvalu, or Tobique. 

Offshore licenses open many opportunities for gambling businesses since companies do not need to pay taxes on income received in other countries. In addition, there are relaxed compliance requirements so you focus on your business growth instead of struggling with red tapes. 

Holding an offshore license means you are not subject to the strictest regulations in the United States. You can be physically in the USA, but derive your income from running a business abroad legally and easily. 

Wrapping Up

Sweepstakes casinos offer an alternative to traditional online gambling experiences. They allow players to enjoy casino-style games without wagering real money. These platforms are different from conventional online casinos.

A free-to-play model allows players to have a free way to enter a win and receive free Sweeps coins; games use chance-based mechanics. Because of these features, most sweepstakes casinos avoid gambling classification and can operate without a traditional gaming license in most U.S. states and not just in America, but all over the world.

Sweepstakes casinos are still a smart way to expand into new markets, reach new customers, and grow your business popularity. 

At MGL, we provide a modern and highly popular sweepstakes solution. We work with over 120 leading iGaming providers in key markets like the United States, Australia, Canada, Mexico, and Brazil. We also give access to the top payment gateways like PayPal, credit cards, American Express (AmEx), and cryptocurrencies.